Limit to leases on federal land will have impacts

Wyoming is blessed with a rich endowment of natural energy resources, both hydrocarbon based and otherwise. The nation has relied on Wyoming and our resources to fuel its economy for decades and continues to do so. This is something that Wyoming is known for domestically and internationally, and is a point of great pride for Wyomingites. As a consequence of the role Wyoming has played in powering the nation, our economy and state finances are heavily dependent on energy extraction and generation based taxes and royalties. The role Wyoming’s energy economy plays in the overall wellbeing and quality of life of our citizenry cannot be over-stated. With a goal of continuing to fuel the nation, Wyoming has looked towards the future and invested in technologies that will meet market demands, while ensuring  the state’s energy strategy embracing an all-of-the-above energy mix cognizant of, and responsive to, customer demands. 

On January 27, 2021 the Biden-Harris administration issued executive orders that seek to limit future development of oil and gas resources on federal land. The impact of such decisions on Wyoming and other Western states with federal lands is disproportionate because of the large extent of federal lands within the state, and the large proportion of oil and gas production that comes from access to federal mineral rights. Approximately 50% of current Wyoming oil production comes from federal land, and nearly all natural gas production. Given that oil and gas production contributes about one-third of total contributions to the state general fund, it is undeniable that these decisions will heavily impact the wellbeing of the state as a whole. 

To what end? The decisions of the administration are purportedly driven by a desire to reduce CO2 emissions. However, the executive orders will likely have little to no effect on emissions for one simple reason: they do not impact, in any way, consumption. The orders are not going to change how much people drive, or use air-conditioning in the summer, or their desire for high tech consumer products. All these consumer needs are met with oil and gas resources and the demand is not going away. What will happen is that the oil and gas will be sourced from other suppliers not on federal lands. Maybe domestically, but most likely a mix of domestic and international producers will fill the void. It is actually conceivable that emissions will increase as a consequence of having to import hydrocarbon resources or tapping supply that has less stringent production requirements than those imposed by the federal permitting process. 

We find ourselves in a situation where a policy initiative is extremely ineffective, but also disproportionately punitive – simultaneously imposing grossly unfair economic hardship on communities and societies that take great pride in the role they have played in delivering the energy-enabled high standard of living enjoyed by all Americans. If the Biden-Harris administration desires to make a tangible difference in emissions, and face the challenges that confront the nation, there are alternative approaches with policy and actions that are more effective, unifying, respectful and equitable. This recent executive order does not fill the bill.    

Dr. Glen Murrell has over two decades of experience in the oil and gas industry and is the inaugural executive director of the Wyoming Energy Authority.

This op-ed originally ran in the Casper Star Tribune on February 8, 2021.

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